Guns are big business. Every time there is a shooting, there is discussion of gun control. When that happens, people start buying more guns.

That means firearms manufacturer Smith & Wesson (SWHC) is expecting another good quarter when it reports its third-quarter results late Thursday.

Smith & Wesson is a market leader with lots of growth potential, especially with its new focus on making acquisitions to diversify its business beyond guns. 

The stock, at around $25.40, is up 15% for the year to date compared with a broader S&P 500 down 5.5% for the period.   

For the quarter that ended in January, analysts, on average, expect earnings per share of 38 cents a share on revenue of $173.64 million, or year-over-year increases of 153% and 33%, respectively. For the full year, ending in April, earnings are projected to be climb 153% year over year to $1.41 a share, while full-year revenue of $657.88 million would mark a 19% rise from the year-ago quarter.

There's nothing conservative about these projections, particularly the earnings growth rates for both the quarter and full year. Analysts have gotten more bullish, raising their earnings estimates for the quarter and the year. 

Thanks to strong gun sales, the Springfield, Mass.-based company has hit is earnings targets for 11 consecutive quarters. In fact, It's been more than three years the last time the company didn't beat Wall Street's estimates. Even then, the results were in line with expectations. Remarkably, Smith & Wesson has achieved this despite renewed calls for stronger background checks and tougher guns laws.

As noted, Smith & Wesson is also looking at the $60 billion sporting goods industry as its new growth opportunity. The company recently laid out a five-year growth plan, indicating it would look for M&A deals to capitalize on outdoor goods. Thanks to its 2014 acquisition of Battenfeld Technologies, Smith & Wesson currently has some $20 million (about 11%) of quarterly sales already coming from outdoor accessories.

While not an entirely new venture for the company, it will take some time to execute. To the extent this new venture, which produces more than 50% gross margins, can grow, shares may yet be cheap despite its recent gains. So hold on to your Smith & Wesson shares.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.